DATA SPECIAL ...............The Hidden Danger in Your Data

The Hidden Danger in your Data

Metrics are a valuable tool for managing your business, but the numbers may be concealing what really matters.

Today, entrepreneurs have tools and technologies to collect, monitor, and document more data than ever before. You're likely swimming in data, since customers leave a trail of it everywhere they go to be captured and analyzed in real time. As I've often said, in business, what gets measured (and acknowledged and rewarded) is what gets done. I haven’t changed my belief about that, but I have come to see that we are putting too much emphasis strictly on the numbers. Numbers don’t lie, but they never tell the whole story. They can only take you so far before they top out and you need something more qualitative and experiential to get to the right conclusions.

Peter Drucker’s dictum “if you can’t measure it, you can’t manage it” has created a whole generation of leaders who are so focused on perfecting their company's processes that they lose sight of the company's purpose. I hear managers all the time talking about the need to get more work out of their people when they should be trying to get the best work out of them. Optimizing (not maximizing) the team’s output is what matters most to the ultimate success of a business. Working smarter and more effectively--not necessarily longer or harder--is how you ultimately move ahead of the competition.

You need to be exceedingly careful these days that you don’t let the ease of access and the ubiquity of massive amounts of quantitative performance data cause you to over-emphasize the math and measurements--and thereby lose sight of the far more important qualitative attributes of what’s going on. Not everything is easy to measure or quantify, but that doesn’t make these things less important; it just makes your job as manager tougher. But when you get so wrapped up in the measurement process that it becomes the goal itself, it loses its effectiveness. It’s easy to confuse movement with progress, but not all motion is forward. And lots of activities that run up the numbers aren’t remotely productive. Measuring is easy; measuring better is tough.

Plus, when you let the numbers basically drive the train, you give up two important advantages that are critical to your success. First, the goal isn’t to be the thermometer; it’s to be the thermostat. It’s not about measuring the heat; it’s about generating and controlling the heat. You don’t want the analytics to lead you; they’re a useful benchmark and a guide for course corrections, but it’s your job to set the direction and move the business forward. Second, when you get so focused on specific and concrete financial results (sales targets, growth rates, etc.) and you direct all your team’s energies toward getting as close to achieving those numbers as possible, you actually limit your ultimate upside because you lose the ability to think and see beyond those immediate goals. When a game-changing opportunity arises or a quantum shift occurs in your sales prospects, your team will likely be so heads-down chasing those numbers that someone else will come along and grab the new brass ring.

Here are three principles that have helped me resist the temptation to get too caught up in the numbers--and focus on what truly matters at my company:

1. Elaboration is a form of pollution.
   Tell your team to keep it simple. No one gets paid by the page, and shorter is almost always better. I’ve found that when people expand and extend their plans, proposals, and presentations, there’s a high degree of likelihood that they’re concerned about the value of their pitch, so they try to bury it in a boatload of facts, figures, charts, citations, and everything else that just hides the hard truth. It’s better for everyone when your people put things right out there--front and center--and take their medicine if that’s what’s called for. If you torture the numbers long enough, they’ll say whatever you like, but that’s not any way to get to the truth or the right result.

2. Not everything is worth doing well.
   Tell your team that everyone's always on the clock. There's an opportunity cost associated with everything you do, so choosing what not to do (and how extensively to do the things you need to do) are critical in any startup which has scarce resources and time. Some things just don't warrant the full-court press, and it's important to make sure that everyone knows that that's OK with you. Other things shouldn't be done at all, and you should never try to do things cheaply that just aren’t worth doing. It's never easy to turn people down or say, "No," to marginal choices, but it's part of the job.

3. No one's ever measured how much the heart can hold.
   Ultimately, the value of the critical connections your people make every day with your clients and customers can only be roughly approximated by even the best math. But it's those daily personal and emotional interactions with your empowered employees that build crucial engagement as well as the lifetime value of those buyers for your business. You need to give your team permission to do what's best for the customer in the moment that the opportunity arises. If they need to consult a rule book or have a calculator handy to do the math, they'll lose the value of the moment every time. The best businesses don't worry about the number or sheer volume of moments--they work to make each moment matter. 

BY HOWARD TULLMAN http://www.inc.com/howard-tullman/danger-in-your-data.html?cid=em01014week45d